India Opposition Seeks Probe of Wal-Mart Lobbying Cash

Dec. 12 (Bloomberg) -- India will appoint a retired judge
to probe claims Wal-Mart Stores Inc. broke rules as it lobbied
to enter the country’s retail market, easing a tussle in
parliament that had stalled proceedings.

The investigation will be a “time-bound” inquiry based on
“media reports” into Wal-Mart’s activities, Parliamentary
Affairs Minister Kamal Nath said today in the legislature. The
company denies any wrongdoing.

Citing company disclosure filings before the U.S. Senate,
the Press Trust of India said Dec. 9 that Wal-Mart spent as much
as $25 million since 2008 on discussions regarding its foreign
investments, including in the Indian retail industry. Opposition
lawmakers, who last week lost parliamentary votes seeking to bar
overseas supermarkets, have alleged part of the money was spent
in India, where paid lobbying is not allowed.

“The allegation that a routine U.S. lobbying disclosure
form reflects improper conduct on our part in India is false,”
Wal-Mart said in an e-mailed statement today. “This disclosure
has nothing to do with political or governmental contacts with
India government officials.” The statement gave no estimate of
Wal-Mart’s lobbying expenses.

Victoria Nuland, a U.S. State Department spokeswoman, said
the report in question is part of a regular, federally mandated
disclosure.

“We have no reason to believe there was any violation of
U.S. law in this case,” Nuland said in an e-mailed statement
yesterday.

Parliament Votes

Protests in both houses of India’s parliament over the
issue ended today after two days of disruptions.

Parliament last week endorsed a September decision to allow
foreign investment in retail stores selling more than one brand,
the centerpiece of Prime Minister Manmohan Singh’s biggest
embrace of foreign investment in a decade.

In votes in both houses of the legislature, the government
defeated opposition parties led by the Bharatiya Janata Party,
which argued that the move would put family-owned stores out of
business. The win gave new life to a reform push unveiled as
growth in the economy slowed to a three-year low.

A “report in the American Senate proves that Wal-Mart
spent money in India to enter this country,” BJP leader
Yashwant Sinha, said in parliament yesterday, demanding a quick
judicial probe into the issue. “The country should know who
were the beneficiaries of the money spent by Wal-Mart.”

U.S. Spending

Overseas companies including Wal-Mart, Tesco Plc and
Carrefour SA will benefit from entering the world’s second-most
populous nation, where retail sales are estimated to reach 47
trillion rupees ($863 billion) by 2017, according to a report by
Associated Chambers of Commerce & Industry of India and Yes Bank
Ltd.

“The Wal-Mart report has come in handy to the opposition
to keep alive the issue after the victories of the government in
parliament,” said Sandeep Shastri, a lecturer in politics a
Jain University in Bangalore. “It’s a stick with which to beat
the government.”